UPDATE 3-Nokia Siemens to cut 5,800 jobs, save $1.5 bln

* Seeks to save 500 million euros in fixed costs

* Wants "substantially" greater savings in procurements

* Some 7-9 percent of staff could be affected

* Revamps organisation to focus better on services

HELSINKI, Nov 3 - Struggling telecom equipment maker Nokia Siemens Networks aims to cut upto 5,800 jobs and save more than 1 billion euros ($1.48 billion) to stay competitive in the cut-throat market.

Telecom gear makers have been hit hard by the recession, which crimped operator spending, and by tough competition from China's Huawei and ZTE.

"To match the commercial flexibility demonstrated by Chinese vendors, NSN also had to cut back its production, R&D and overhead costs," said Pal Zarandy, partner at telecoms consultancy Rewheel.

Market leader Ericsson last month reported earnings below expectations and declined to forecast an upturn..

NSN, a joint venture of Nokia and Siemens, said it aimed to cut 500 million euros in annual costs by the end of 2011, putting up to 5,800 of the firm's 64,000 staff at risk.

It said the programme, something analysts have expected given the persistently tough market conditions, could bring total charges of some 550 million euros in 2010-11.

"They could be making money again in 2011," said SEB analyst Mats Nystrom.

"They have had catastrophic sales, but with cuts they could reach mid-single-digit margins from 2011. For higher margins, the market needs to turn to the better," he said.

NSN also said it aimed for savings "substantially larger" than 500 million euros by lowering procurement costs. "This targeted reduction is expected to position the company to meet ongoing customer requirements for competitive pricing."

Nokia shares were little changed, off 0.9 percent at 8.64 euros at 1251 GMT.

TOUGH BLOW

The cuts are the latest blow for the joint venture, which started operations in April 2007 and then unveiled a 1.5 billion euro cost-savings programme the following month -- later bumped to two billion -- including some 9,000 job cuts.

"Changes in the global economy and competitive environment make further cost reductions necessary," it said in a statement.

Last month, parent Nokia booked a 908 million euro charge for the third quarter due to NSN. It said NSN's markets would fall by five percent in euro terms in 2009 versus 2008, and the venture would lose more market share than expected.

NSN said on Tuesday it would shrink its five business units to three as part of the shake-up, and would consider partnerships and acquisitions to boost growth.

For a factbox on ailing telecom gear makers see

(Reporting by Brett Young, Tarmo Virki, and Eva Lamppu; Editing by David Cowell)